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China Economic Developments - Coggle Diagram
China Economic Developments
1st Five year plan (1953-7)
Results
Success
Annual average 16%; industrial output +15.5% per year (target = 14.7%).
Heavy industry output nearly *3; railway freight volume doubled.
Industrial workforce: rose from 6 million → 10 million.
Key project: Anshan steel complex — 35,000 new workers, producing ⅔ of China’s steel by 1957.
Socialist transformation:
1953–56: private firms converted to joint state-private, then fully nationalised.
Retail & small trades (e.g., tailors, barbers) reorganised into co-ops.
Urban control:
Workers organised into danwei (work units) controlling housing, food, marriage, travel.
CCP expanded control through workplace surveillance
Failures
Forced low-price grain sales to fund repayments for Soviet loans
Peasants left at subsistence level; urban food shortages persisted.
Citizens saved by necessity → bought government bonds → funded Plan, but shops were empty.
Weak management, poor coordination between central and local industry → production bottlenecks.
Neglect of welfare sectors:
Limited investment in education & healthcare.
Rural China: few trained doctors, minimal schooling.
Agricultural stagnation: Output growth just 2.1%/year vs 14.1% (1949–52)
Problems
Skilled Labor: Many workers were illiterate and untrained, causing equipment damage.
Poor Planning: State planners often lacked technical knowledge, leading to inefficiencies.
Resource Competition: Scarcity between industries and between state/private enterprises.
Soviet Loans: Borrowed money from the USSR at high-interest rates, repaid through food exports.
Targets
Main Goal: Achieve self-sufficiency and build socialism in China.
Mao's Vision: Full industrialization would take at least 15 years (3 Five Year Plans).
Soviet Model: Inspired by Soviet Union’s industrialisation through Five Year Plans.
In 1953 the CCP declared: “Industrialisation has been the goal sought by the Chinese people for 100 years.”
Context: Industrial output in 1949 = Only 10-20% of its pre WWII level
• <50% in coal, ~75% in electricity, 70–90% in consumer goods.
Aims
Rapid growth in heavy industry (steel, coal, iron, engineering).
Investment in modern, large-scale plants.
Self-sufficiency (autarky) due to lack of Western trade.
Grain procurement from countryside at fixed prices to fund urban industrialisation
→ 1953 target: 22 million tons; private grain sales banned.
Soviet support
After the Korean War armistice (1953), Soviet aid to China expanded dramatically:
156 major industrial projects built or reconstructed, including: 7 iron plants, 24 power stations, 63 machinery plants
11,000 Soviet & Eastern European experts sent to assist with design, construction, and training.
28,000 Chinese technicians trained in the USSR to learn central planning techniques.
$300 million loan provided over five years.
Sino-Soviet Mutual Assistance Treaty (1950), both pledged economic and technical co-operation.
Collectivisation
1951: Cautious cooperative agriculture
Mutual-aid teams: Groups of up to 10 peasant households sharing resources
Limited to poorer peasants
1955-56: Rapid collectivisation
17 million households in APCs by July 1955
75 million households (63% of the peasant population) by January 1956
Only 3% of households still farmed privately by end of 1956
Mao declares collectivisation achieved 15 years ahead of schedule
1952-53: Agricultural Producers' Cooperatives (APCs) established
30-50 households pooled land and labor to improve productivity
Peasants retained private ownership within APCs
Profits shared based on 'land-share' and 'labour-share'
Wealthier peasants received larger shares of profit
1955: Introduction of 'Higher Stage' APCs
200-300 households per APC, larger than a single village
Land ownership still private; 5% of APC land allowed as private plots
Wealthier peasants no longer received the largest share of profits
State loans withheld from resisting peasants
Impact
Strengthened CCP control in the countryside
Disappointing agricultural production
Agricultural production grew only 3.8% from 1953-1957
Purge of Peng Dehai
Effects
Mao pushes for a more extreme wave of GLF
A wider purge followed, with six million Party members and officials facing struggle meetings and forced self-criticism.
In Sichuan, 80% of grassroots Party cadres were dismissed.
Mao launches the GLF, many CCP members privately doubted success
1959: Peng Dehuai visits Henan, learns about the GLF's failures.
July 1959: Peng writes a letter to Mao, criticizing specific failures of the GLF.
Mao publicizes the letter, accusing Peng of being a rightist.
Peng is dismissed as Defence Minister and placed under house arrest.
New Defense Minister: Lin Biao replaces Peng.
Aftermath: It becomes unsafe for Party members to criticize Mao.